California law, California Civil Code 2923.6, sets a policy that a lender must accept a modification proposed by a borrower if the lender would make more money or lose less money under the modification proposed than the lender would lose if the lender foreclosed. Washington does not have such a law at this time, but Washington often models its laws after California’s. Also the California statute has persuasive precendent. It is not clear just how binding this statute will turn out to be when it is tested in court.

All loans that meet the applicable HAMP eligibility criteria in Section 1 must be evaluated using a standardized NPV test that compares the NPV result for a modification to the NPV result for no modification. … Using the applicable standard modification waterfall, if the NPV result for the modification scenario is greater than the NPV result for no modification, the result is deemed “positive”. If the NPV result for no modification is greater than the NPV result for the modification scenario using the applicable standard modification waterfall, the modification result is deemed “negative”. If there is a positive NPV result under the HAMP Tier 1 standard modification waterfall, the servicer must offer the HAMP Tier 1 TPP regardless of the HAMP Tier 2 NPV result. If there is a negative NPV result under the HAMP Tier 1 standard modification waterfall and the investor has authorized a different threshold, or the modification has excessive forbearance and the investor has authorized the service to exceed the forbearance limit, the servicer may offer the HAMP Tier 1 TPP. If the borrower is not offered a HAMP Tier 1 TPP and is NPV positive under the HAMP Tier 2 standard modification waterfall, the servicer must offer the HAMP Tier 2 TPP. If there is a negative NPV result under the HAMP Tier 2 standard modification waterfall, the servicer may, based on investor guidance, offer the HAMP Tier 2 TPP.

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5 Comments

Wayne / October 29, 2009

I’d llike info about modification of my mortgage. I have a co-signer on the loan. Does this affect modification? I am current on loan with Ocwen but my loan and home association fee is over 50% of take home pay.

Having a “co-signer” on your loan should not prevent you from obtaining a modification if you otherwise qualify. Ocwen has signed onto the Making Home Affordable program. Your payment, including principal, interest, taxes, insurance, and home owner association dues, should be modifiable. Your payment for PITI and HOA should be no more than 31% of gross income, not take-home pay. Most “co-signers” are really co-owners. Does this co-signer have income? Probably your income and the income of the “co-signer” would be added together and then multiplied by 31% to determine what your total payment should be. If your “co-signer” has moved out and has not contributed to payments, it might be possible to have the “co-signer” income not counted as part of total income. Modification is sometimes very easy and sometimes very complex. My fee is 1.0% of your loan balance or $3,500, whichever is less. I accept credit cards in payment. Feel free to call.

My father and I co-signed a loan together on a home. My girlfriend used to live with me and she supplied half of the income for the mortgage. Now she is moved out and I am left with the whole mortgage. I want to apply for HAMP but I am concerned my income is too little to be considered for HAMP alone. Would they use my father’s income in the HAMP process even though he does not live there? Also, how much do you charge to get me through the whole process?

Because your father is on the loan, you should be able to use his income, even though he does not live with you. Under the new FTC regulations, I can help you only if you are in Washington, the only exception being that I can work for borrowers in other states if they have a sponsoring attorney. You can probably find an attorney in your home state who has modification experience. My typical fee is $3,500 paid at the beginning of the process or over the first two or three months. We accept credit cards, but we add 3.0%. We then charge a bonus upon completion, around 3.0% of what we save you during the firsts five years of your modified loan. Some clients save $50,000 to $100,000 just over the first five years, not counting what they save over the life of the loan. Feel free to call us at 425-771-1110.

I was interviewed by your Rep. (Mr. Kevin Foster) on Jan. 20 2011.
He asked me to fax him some documents.
the fax. # he gave me is;
866-649-9743
But this is a phon number to SUNTRUST Bank.
He gave also gave mne a phone number that I am unable to talk to anyone.
please email me (rezaralaie@aol.com), a good fax # for LBPS. Loan Modification Department.
.